India announces ₹7,295 crore export credit support package to ease financing for exporters

New Delhi: India on Friday announced a ₹7,295 crore export support package, comprising a ₹5,181 crore interest subvention scheme and ₹2,114 crore collateral support, to improve exporters' access to credit.

Both measures will be rolled out over a period of six years from 2025-2031. This is the second component of the Export Promotion Mission to be launched after the first component, ₹4,531 crore market access support, was rolled out last week.

"We aim to make make trade finance faster and cheaper. These interventions will address the trade finance issues of exporters," said Ajay Bhadoo, additional secretary, commerce and industry ministry.

Under the interest subvention scheme, exporters will get a subsidy on pre- and post-shipment export credit and help exporters from identified sectors to avail of rupee export credit at competitive rates at a time when global trade is facing headwinds.

The interest subvention will be applicable only to exports covered under a notified positive list of tariff lines, covering approximately 75% of India's tariff lines and reflecting high MSME participation.

"The positive list has been prepared using a transparent and data-driven methodology, prioritising labour-intensive and capital-intensive sectors, MSME concentration and value addition, while excluding restricted and prohibited items, waste and scrap, and products covered under overlapping incentive schemes. Defence and SCOMET-notified products have been included to support strategic exports," the commerce and industry ministry said. SCOMET stands for special chemicals, organisms, materials, equipment and technologies.

Under the scheme, the government will provide subsidy benefits in the range of 2.75% to eligible MSME exporters. The annual benefit is capped at ₹50 lakh per firm.

The detailed guidelines of the scheme will be released by the RBI, which is the implementing agency, along with the Directorate General of Foreign Trade (DGFT).

The government has also announced a ₹2,114 crore collateral support for export credit wherein credit guarantee support will be given to MSMEs for export-linked working capital loans.

Up to ₹10 crore collateral guarantee per firm will be provided under this support measure.

Under this intervention, a collateral guarantee support for export credit is being introduced in partnership with the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).